Softlogic ups after tax profit by 88% to Rs. 2.4 b in FY15

Softlogic Holdings Plc yesterday announced a consolidated turnover growth of 35% to Rs. 40 billion in the financial year ended 31 March 2015 with a Rs. 11.7 billion contribution in the fourth quarter, up by 56.5% over the previous year.

Profit Before Tax recorded an exceptional growth of over 87.7% YoY to record Rs. 2.4 billion while the quarter registered a significant  YoY growth of over three-fold to reach Rs. 930.5 million. Profit After Tax for the period was Rs. 2.4 billion, up 88% YoY. The quarter PAT was Rs. 747.7 million (up 263.5% YoY).

Group Gross profit increased 28.3% YoY to Rs. 14.1 billion in FY15 with quarterly gross profit recording a 35.4% YoY growth to Rs. 4.1 billion.

Operating Profit increased 73.4% YoY to Rs. 1.2 billion during 4QFY15 to read a 22.1% YoY to Rs. 4.4 billion for the full year. Operating cost margins were contained at 27% during the year despite the group’s increasing scale of operation with notable cost savings emerging during the last quarter of operations (from 32.6% to 26.2% in OP cost margins).

Other Operating Income of Rs. 1.0 billion was a result of realised mark-to-market gains on equity and Available-For-Sale portfolio at Asian Alliance Insurance Plc (Rs. 585.9 million).  

Primary contributors to Group Operating Profit for the year were Healthcare Services, Financial Services, Retail and ICT. Finance Income, primarily comprising gains in Asian Alliance Insurance Plc’s investment portfolio, registered a marginal decline of 3.7% YoY to record Rs.1.1 billion during the year while the quarter reported a decline of 75.7% YoY to Rs. 135.1 million. 

The latter was primarily due to mark-to-market losses in their equity and fixed income portfolio being highly sensitive to treasury/ bond market rates. Of this Rs. 944.3 million was transferred as share to life policyholders/insurance contract liabilities during the year while the quarter recorded a transfer of Rs. 194.2 million. 

Finance Expenses increased marginally by 3.5% to Rs. 2.8 billion during the period with market interest rates continuing to decline. Consequently, net consolidated finance expenses reduced by 9.0% YoY to Rs. 1.6 billion for the year.

A gain of Rs. 513.4 million was recorded as change in fair value of investment property of Asiri Central Hospital at Horton Place during the quarter. 

Softlogic said the FY15 marked its pivot with the acquisition of Odel Plc to ensure greater synergy and breath. Critical management input and restructuring expertise both have seen the retailer rapidly and efficiently moving out of operating losses incurred the previous year to a healthy operating profit after six months of Softlogic’s acquisition of this entity.

“With Movepick City Hotels targeted for completion early 2016, this would significantly unlock cash flows and improve revenues and contributions to the Group. With most sectors demonstrating promising results at this stage, a wave of growth expectations is clearly visible for the upcoming periods,” Softlogic added.